Stewart jurors begin second day of talks

Stewart jurors begin second day of talks
Deliberations delayed one hour following subway accident

The Associated Press
Updated: 11:48 a.m. ET March 04, 2004

NEW YORK - Jurors began their second day of deliberations in the trial of Martha Stewart on Thursday after an hour

Shortly after 11 a.m., four late jurors arrived at the federal courthouse and deliberations for the 12-member panel were once again under way, marshals said. Subway service had been disrupted after a train at a lower Manhattan station hit a person about 9:10 a.m.; the person survived.

When all the jurors were assembled, they planned to use a laptop computer to replay part of the testimony of Stewart’s stockbroker before the Securities and Exchange Commission in February 2002, the judge said.

On Wednesday, its first day of talks, the jury asked to review a considerable amount of evidence, including the testimony of the brokerage assistant who handled Stewart’s sale of ImClone Systems stock.

The jury also asked for another look at a portfolio worksheet that the government claims was doctored by broker Peter Bacanovic to make it appear he and Stewart had agreed to sell ImClone at a certain price.

Whether the price agreement — to sell the ImClone stock at $60 per share — ever existed is central to what the jury must decide: Did Stewart and Bacanovic lie to investigators about the circumstances of the sale?

The government claims Stewart was actually tipped just hours before she sold the stock on Dec. 27, 2001, that ImClone CEO Sam Waksal was unloading his shares in the company.

Stewart’s lawyer concedes she was tipped but claims the $60 agreement was the central reason she sold. He also claims Stewart was telling the truth when she told investigators in April 2002 she had no memory of the Waksal tip.

Jurors deliberated for about four hours Wednesday. They were to return Thursday to study the evidence they requested.

In a note less than two hours after deliberations began, jurors asked to review testimony by Douglas Faneuil, the former Merrill Lynch & Co. assistant who claims Bacanovic ordered him to tip Stewart about Waksal.

Jurors specifically asked for what Faneuil said about his conversations with Bacanovic and Stewart that day. Lawyers spent the afternoon going through stacks of transcripts before settling on what the jury would review.

Faneuil claims he first told Bacanovic on the morning of Dec. 27 about the Waksal family trying to get out of ImClone stock. He claims Bacanovic told him, “Oh, my God, get Martha on the phone.”

Faneuil testified he alerted Stewart later that day about the Waksal selling. He said Stewart asked him twice for a quote on ImClone’s stock price, then ordered him to sell her shares.

The jury seemed to hint in a second note that it was focusing on one particular specification in the indictment — that Bacanovic was deliberately lying when he told investigators he personally handled Stewart’s stock sale.

Faneuil actually handled the sale. Bacanovic corrected himself in a follow-up interview with investigators, but the government contends his original misstatement was part of an attempt to cover up the truth.

The combined charges against Stewart carry a penalty of up to 20 years in prison. If convicted on any charge, she also would be required to step down as chief creative officer of her media company, Martha Stewart Living Omnimedia.

Stewart is charged with conspiracy, obstruction of justice and two counts of making false statements.

Bacanovic is charged with one count of making false statements, making and using false documents, conspiracy, perjury and obstruction of justice — charges that carry a prison term of up to 25 years.

Under federal guidelines, the sentence for either defendant could be sharply reduced, even to less than a year, if convicted.

The overlapping conspiracy count accuses Stewart and Bacanovic of working together to devise the $60 agreement as a cover story to mislead investigators.